Bank deposits witness hike by 13.2pc in 10 months of 2021: SBP

KARACHI: The State Bank of Pakistan (SBP) on Thursday announced a record 13.2 percent hike in the bank deposits during the first 10 months of the ongoing year 2021, ARY NEWS reported.

According to the Central bank, the bank deposits in January 2021 stood at Rs17,085 billion and raised to Rs19,343 billion at the end of 10 months of the ongoing year, witnessing a 13.2 percent hike.

It further shared that bank deposits in September were all-time high at Rs19,829 billion, however, Rs586 billion was withdrawn during the month of October.

It is pertinent to mention here that the State Bank of Pakistan (SBP) recently decided to increase the average Cash Reserve Requirement (CRR), to be maintained during a period of two weeks by scheduled banks.

According to details shared by the Central bank’s spokesperson from its Twitter handle, the average Cash Reserve Requirement (CRR) has been increased from five percent to six percent and minimum CRR is to be maintained each day from three percent to four percent.

It is pertinent to mention here that the CRR is the amount of money that banks are required to keep with the State Bank of Pakistan and is applicable on demand liabilities and time liabilities with the tenor of less than a year.

While explaining the move, the SBP in its release shared that with the economy recovering briskly from last year’s acute Covid shock, there is a need to gradually normalize policy settings, including the growth of monetary aggregates.

The bank shared that in recent months, real money supply growth has drifted above its trend. “Today’s measure will moderate this growth as well as domestic demand, thereby helping to sustain the current economic recovery, achieve the government’s medium-term inflation target, and reduce pressures on the rupee,” he said.